CARES Act

CARES Act

During this challenging time in our society, we must continue to give charitable contributions to our congregations, as we can, to ensure these vital ministries continue to serve our communities. The legislation recently passed assists our parishioners and donors to do this as well. The recently enacted government stimulus bill provides additional tax relief for donors, which makes it easier to give and save at the same time.

During this challenging time in our society, we must continue to give charitable contributions to our congregations, as we can, to ensure these vital ministries continue to serve our communities. The legislation recently passed assists our parishioners and donors to do this as well. The recently enacted government stimulus bill provides additional tax relief for donors, which makes it easier to give and save at the same time.

If you take the standard deduction on your 2020 tax return (the one that you'll file in 2021), you can claim a brand new "above-the-line" deduction of up to $300 for cash donations to charity you make this year. Contributions to donor-advised funds and particular organizations that support charities are not deductible. Typically, you have to itemize on Schedule A to get a tax break for charitable donations. In this case, though, it's the other way around—if you itemize, you can't take this new deduction.

If you itemize on Schedule A of your tax return, you can claim a deduction for your charitable donations. However, the amount you can deduct for cash contributions is generally limited to 60% of your adjusted gross income (AGI). Any cash donations over that amount can be carried over for up to five years and deducted later.

The CARES Act lifts the 60% of the AGI limit for cash donations made in 2020 (although there's still a 100% AGI limit on all charitable contributions). That means itemizers can deduct more of their charitable cash contributions this year, which will hopefully boost charitable giving. As with the new above-the-line deduction, donations to donor-advised funds and supporting organizations don't count.

Please consult with your tax professional to determine the best course of action for you and your family.